Special Report -- Silicon Valley -- The Next Generation
GARY REBACK--Attorney, Wilson Sonsini Goodrich & Rosati
Gary Reback has been turning up on lists everywhere this year. The one he's most proud of is the National Law Journal's, where he's ranked as one of the 100 most influential lawyers in America. "The write-up says I am viewed as the protector of the marketplace by many Silicon Valley companies," he says. "I want to keep markets open so that new entrepreneurs will have access to the market, be able to build companies, develop new technology, create jobs for people, and create products that enrich people's lives. It's an exciting practice to have."
Controversial is another word to describe Reback's role these days at Palo Alto's Wilson Sonsini Goodrich & Rosati. As head of its high-technology group, he has made a name representing some of Silicon Valley's hottest and biggest companies. His clients have included Sun Microsystems, Sybase, Novell, Borland International, Hasbro, Lexis-Nexis, and Netscape. Increasingly, Reback has been at the center of disputes between many of these companies and Microsoft Corp., earning him a reputation as "David facing Goliath" and the "biggest thorn" in Microsoft's side.
Reback began to win renown as a Microsoft-fighter in the early 1990s, when the Federal Trade Commission started investigating the software behemoth for alleged anticompetitive trade practices. He represented a number of Silicon Valley companies who felt they had been unfairly pushed out of one market or another by Microsoft, which ultimately was stuck with a Federal Trade Commission consent decree governing some of its activities. Representing three unnamed technology companies (rumored to be Sybase, Sun, and Borland), Reback also took on Microsoft over its 1994 plan to acquire electronic checkbook maker Intuit Inc. for $2 billion. In early 1995, Microsoft scuttled that deal.
"This is as good as success gets for lawyers. The point was to stop the merger, and Microsoft backed off," says Pamela Samuelson, a professor at the University of California at Berkeley's Boalt Law School who specializes in intellectual property and cyberlaw issues. "Gary's white paper was sufficiently powerful to make the Justice Dept. officials say...we should really think about this and do something about it," she adds.
It also make other antitrust lawyers take notice. Some feel that Reback was just trying to get publicity for clients who were hardly underdogs. "His prominence is principally tied to his involvement in proceedings with Microsoft, whom he has challenged for so-called uncompetitive practices. His role has been characterized by a vivid and dramatic advocacy which some might think outruns prudence," says Larry Popofsky, a senior partner at San Francisco-based Heller Ehrman White & McAuliffe. "His clients are scarcely the Lilliputians -- they are major Silicon Valley enterprises." Reback responds that he represents plenty of small companies -- and insists that he is not in business to get publicity. "I see myself as an advocate of socio-economic issues, about how our economy should and will work. What role should patents have in technology industries? What should the role of copyright protection be? Is monopoly really a good thing?"
In his assaults on Microsoft, Reback has pushed the theory that in the software business "he who has, gets" -- that whoever finds a market first may be able to dominate it, despite having what ultimately may turn out to be an arguably inferior product. If this theory is right, "it calls into question the idea that the free market can select for us the best goods," Reback argues. In that case, "there has to be a role of government to make sure that companies with superior technology" get a fair chance to compete. "The traditional antitrust economics...are based on the economics of manufacturing industries," adds Berkeley's Samuelson. "The economics of digital marketplaces are inherently different. There is a new economic learning that needs to be taken into account. Gary has been drawing on the work of young economists doing cutting-edge work."
Born in Knoxville, Tenn., in 1949 (his father was an analyst at the Atomic Energy Commission), Reback went to Yale University, where he worked part-time as a computer programmer in the economics department and graduated magna cum laude in 1971. After college, he decided to try law school at Stanford, where he became enamored of antitrust law. In 1975, after clerking a year in the Fifth Circuit in Atlanta, Reback signed up with Washington (D.C.)-based Covington & Burling, working on large antitrust cases involving telecommunications and natural resources. "I've always enjoyed bigger cases with more sophisticated problems," he says. In 1981, Reback moved to Palo Alto to head up Fenwick & West's antitrust practice. Then in 1991, itching to handle bigger cases, he jumped to Wilson Sonsini, the premier high-tech firm in the region.
Reback is weary these days from his heavy workload, which often consumes seven days a week and keeps him away from his wife and two kids. "I don't know if I can keep this up. You take a pounding," he says. He thinks about teaching someday or writing a book. But at the moment, he's too busy worrying about Microsoft.
Last summer, he raised a new set of allegations with the Justice Dept. on behalf of Netscape. One claims that "Microsoft is making it difficult for consumers to get--and manufacturers to carry--an alternative to the Microsoft desktop," that the bundle of software in Windows 95 closes the market to makers of competing software. Reback argues that Microsoft has thus violated its consent decree. "Microsoft is an unregulated monopolist," he contends. "And when it puts a company out of business, it puts a lot of my friends out of work. In my view, it threatens the vitality of Silicon Valley."
"Microsoft is not in any way limiting consumer choice," responds a spokesman, Mark Murray. "Plenty of machines have been shipped without Windows preinstalled." He adds that Microsoft has partnerships with 720 companies that employ more than 10,000 people in California.
His campaign against Microsoft involves "substantially less" than 50% of his cases, but Reback believes his work involving the corporate giant is crucial. "The Internet has revved the economy of the Valley," he says. "Some of the new technologies that people are bringing online are so good. If Microsoft is not allowed to leverage its monopoly, those products will just do wonderfully well. If Microsoft is able to leverage its monopoly and is unchecked by the government...the future is a lot cloudier."
Even opponents concede that Reback's work is useful: "Certainly, he contributes to the dialogue concerning antitrust issues in the computer software industry and raises issues that are of a different perspective," says James Weiss, a partner at Washington-based Preston, Gates, Ellis & Rouvelas Meeds and former antitrust counsel to Microsoft. Reback, characteristically, describes his role more emotionally: "I genuinely feel that having that much power concentrated in one company or person is bad. And I guess that the same thing that drives them towards world domination is the same thing that drives me to try to stop them."By Gabrielle Saveri in San Francisco